Proper green rating needed for proper assessment of environmental impact of projects: Das
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Das called for a systematic green transition without harming economic activity and growth prospects. He added that this is all the more necessary because the actual financial flows for green projects are highly heterogeneous and largely concentrated in developed economies. “Hence, there is an urgent need to increase green capital flows to emerging markets and developing economies,” Das said.
Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday called for proper ‘green rating’ of projects to truly reflect their environmental impact. Along with this, he also asked to ensure that developing countries get adequate funds for green projects. Addressing the G-20 Seminar on Global Economy organized by the Finance Ministry and RBI, Das said the major risks to global growth are climate change as well as inflation, financial stability and geopolitical pressures. “Our focus should be on addressing long-term structural challenges such as climate change through availability of adequate and affordable financing for green (energy) transition,” he said.
However, we also need to be mindful of the impact on financial stability for green changes. “The RBI Governor said,” Green capital flows today depend on ESG (Environmental, Social, Governance) ratings. Recent research suggests that these ESG ratings do not adequately reflect the financial and non-financial impacts of these investments. “There is therefore a need to ensure that green ratings reflect the actual environmental impact of projects. reflect the impact so as to avoid ‘false green claims’.
Das called for a systematic green transition without harming economic activity and growth prospects. He added that this is all the more necessary because the actual financial flows for green projects are highly heterogeneous and largely concentrated in developed economies. “Hence, there is an urgent need to increase green capital flows to emerging markets and developing economies,” Das said.
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